Abu Dhabi fund hires RMJM for Algeria project

Published on Saturday 9 August 2008 19:19

AN ABU Dhabi sovereign wealth fund has hired Scottish architectural firm RMJM to work on a vast leisure and residential project in Algeria.

The firm is understood to be drawing up designs for a 30,000-hectare waterfront development in the north African country as cash-rich sovereign funds look to invest their growing oil wealth in commercial properties abroad. A spokeswoman for RMJM would not provide details about the project, but confirmed it is involved with a feasibility study at the site.

UK architects expect to source an increasing number of commissions from sovereign wealth funds in the next few years as the property market continues to suffer at home.

Funds such as the Abu Dhabi Investment Authority, which has more than 425bn in its chest, have been scouting for large commercial property projects abroad as their wealth continues to soar off the back of high oil prices.

Last month an Abu Dhabi fund bought a 75% stake in New York's Chrysler Building, but architects are reporting that there is also mounting interest in new developments.

Matthew Edgar, a property development expert with RMJM, wrote in a recent paper: "The likelihood is that sovereign wealth funds will increasingly invest in building and infrastructure projects."

News of the Algeria project comes as the Royal Incorporation of Architects in Scotland (RIAS) urges Scottish firms to look abroad for future sources of revenue. It says they stand a good chance of winning contracts for public sector projects in Europe.

Neil Baxter, treasurer and secretary for RIAS, said the downturn in the UK and American markets has not yet spread to continental Europe. "There is no question that we have the skills base and the talent and where Scottish firms have gone into Europe they have been singularly successful," he said.

Architectural firms say problems in the house-building sector have now filtered down to the supporting industries.

Last week Malcolm Fraser Architects shed eight jobs in Edinburgh. Atkins cut 21 design jobs in Aberdeen as part of a restructure.